Digital Agency Theory of Financial Inclusion

Abstract

The objective of this study is to present a theoretical framework that explains the digital agency at work in digital financial inclusion. The digital agency theory of financial inclusion examines the problems and solutions linked to delegating financial inclusion outcomes to a digital agent. The theory also examines the various kinds of incentives and monitoring arrangements that can be deployed by the financial inclusion principal to ensure that the digital agent achieves the specified financial inclusion outcome. The digital agency theory of financial inclusion states that the financial inclusion principal will employ the services of a digital agent who will use appropriate digital technologies to achieve the financial inclusion outcome specified by the financial inclusion principal under a contractual agreement that motivates the digital agent to act in the best interest of the financial inclusion principal. The theory has broad applicability for digital financial inclusion.